When most of us think of a rich person, the odds are good that the person you are thinking of has a flashy car, fancy house, and all the luxuries they could ever dream of. In our minds, this person has wealth, and they aren’t shy to show it off.
Many people wonder how to become a billionaire because they crave the lifestyle of the rich and famous portrayed on social media.
On the other hand, some people have worked hard for their money but don’t want everyone to know they are wealthy. Having an average net worth above your peer group can make you the target of criminals.
It can be tough to keep your wealth a secret, especially if you have a lot of money. Between flashy cars and luxury vacations, it’s easy for others to guess how much you’re worth.
Stealth Wealth is the solution for you. And it’s a powerful tool for building long-term generational wealth. Here’s how it works
The stealth wealth lifestyle means having money but not necessarily flaunting it. Instead of concentrating on buying luxuries, people who practice stealth wealth are more likely to keep their money secret. Stealth wealth can be a great way of building up your bank account and saving money while knowing that you have everything they need.
What Is “Stealth Wealth”?
Stealth wealth is a lifestyle where people build considerable wealth while maintaining a relatively discreet public persona.
This idea of modestly achieving significant economic and financial successes goes against the stereotypical notion that high liquid net worth individuals must flaunt their status.
Stealth wealth adherents may choose not to conspicuously buy trendy items or high-end cars as they believe that long-term success comes from sound investing strategies and intelligent lifestyle choices rather than showing off their possessions.
By exercising financial discipline, developing expertise in their high-income skills, and controlling expenses, stealth wealth followers invest in income-generating assets rather than relying on flashy spending to signify success.
What Does Stealth Wealth Look Like?
Let’s answer the most basic question first. Someone who has stealth wealth means that someone is secretly rich.
Like everything else, stealth wealth can come in degrees. On the one hand, it may refer to a person who has a good amount of money and doesn’t necessarily hide it but isn’t flashy about it.
When it comes to stealth wealth, many people think of Warren Buffett. Despite being one of the wealthiest men on the planet, Buffett still lives in the home he bought decades ago. He also infamously drives a 2014 Cadillac XTS that he purchased years ago.
Now, everyone knows that Buffett is a billionaire. However, he doesn’t show off his wealth. Instead, Buffett surrounds himself with relatively ordinary items that keep public displays of his wealth to a minimum. Indeed, to a limited extent, Buffett almost practices a traditional middle-class lifestyle. Some of Warren Buffet’s famous quotes highlight his preference for a simple lifestyle.
Then there are those with a massive net worth who keep it secret, even from family members. These people are not known for spending money, buying enormous possessions, or being experts in personal finance basics.
Indeed, these people tend to be extremely frugal, barely spending a dime unless necessary. More often than not, you only find out that this person has as much money as they do once they die and leave behind a massive inheritance.
Instances of stealth wealth as pure as this are rare and noteworthy, but they unquestionably exist. That means that it is possible for someone to completely hide every penny that they have until they are gone.
Like everything else, stealth wealth exists in degrees. A person who practices stealth wealth may be well known to be wealthy but instead chooses to live a more frugal lifestyle.
Alternatively, someone may be practicing stealth wealth, and no one may know about it – not even that individual’s family and friends. This individual may have a massively high net worth, and no one knows about it. Remember that there are no absolutes in anything, including personal finance.
Why Would You Practice Stealth Wealth?
The biggest question regarding stealth wealth is often this: Why? Why would someone make an extensive effort when hiding money from family, friends, and society? What are the benefits of building wealth and hiding it from others?
Here’s the thing: Many people are built that way. For many individuals, building wealth almost has nothing to do with the benefits of money. For these individuals, stealth wealth shows that they value money differently than most of society.
A wealthy person may choose not to inform others of their high net worth because they are afraid of the changes that doing so may bring to them. Indeed, this altered view of what money and financial independence mean is among the top reasons that a person may practice stealth wealth.
Of course, there are many other reasons that someone may hide their money and net worth from others. Stealth wealth practitioners may have many concerns or fears specific to their upbringing.
Different Perspectives on What Money Means
For many, going on fancy vacations, wearing expensive clothes, or buying expensive cars isn’t why they work hard. Many individuals don’t like to spend money. Instead, they want to know that the money is there if they ever truly need it.
Alternatively, a person with stealth wealth may be working hard in the hopes of leaving a massive inheritance to friends, family, or a beloved institution. They want to avoid drawing attention to themselves. Instead, they want to build true wealth in another form.
Many people who have stealth wealth have had negative experiences with money in the past. They may have lost vast sums of money at previous jobs or have had family members who lost money. As such, having stealth wealth means not spending money but saving it for a rainy day and being fiscally responsible.
Impact on Friends and Family
One of the most common reasons for practicing stealth wealth is the fear that it will dramatically alter relationships with loved ones. Many are deeply concerned with having wealth and not sharing it with others, fearing that family and friends will bug them incessantly for money.
As such, they choose to practice stealth wealth and hide their wealth from others. Indeed, many wealthy people understand that they have to develop a series of social skills to keep someone from bothering them for more money. Saying no is among the most important.
Avoiding Lifestyle Inflation
The idea behind lifestyle inflation is that buying one expensive thing will lead to buying more. This, in turn, can drain your bank account and ultimately hinder your financial goals. As such, people choose to minimize their spending habits by saving money instead of spending it.
It often leads to stealth wealth, as it not only results in money being saved but that money being hidden from others. People like this tend to drive an average car, live in a modest house, and avoid otherwise ostentatious signs of wealth. They understand the difference between the wealthy vs. rich
How Do You Hide You Are Rich?
One of the most critical questions about stealth wealth isn’t just how you earn your money but how you hide it. Once you achieve stealth wealth, how can you keep it from others? Secretly rich people understand that there are certain things you have to do to maintain your stealth wealth.
Avoid Discussing Salary or Income
As tempting as it might be, it is best to avoid letting strangers know what you do for a living. 7 figure salary jobs exist, so if you have a high-paying job leveraging your human capital, be vague about it.
Manage Your Own Finances
More often than not, you’ll need to keep your finances secret from friends and family. You may need to rely on outside experts to help you minimize government taxes and make the best investments possible. Still, you will need to do whatever you can to keep others from knowing how much money you have.
With the abundance of knowledge and availability of personal finance apps, It is easy to figure out how to invest. In many cases, this may mean engaging in your own financial management. You can now track your net worth and portfolio performance using free tools like Personal Capital.
Personal Capital has features to analyze your retirement accounts, eliminate fees, and track your liquid net worth and cash flow. You can read my Personal Capital Review and how I use the various components to set up your free account.
Stealth wealth means you don’t spend whenever possible. It is as simple as that. As such, you’ll need to identify every opportunity possible to save money for future generations or yourself.
It may mean investing in the stock market, maintaining offshore accounts, adequate liability insurance, and keeping money from others.
Above all, you’ll need to keep your living expenses to a minimum, avoiding any outward expressions of wealth. Buying a fancy car is out: Driving your old car is in.
Don’t Be the Face of the Investment
Although landlords provide a vital role in society, politicians have vilified property owners.
If you have invested in rental properties, get a property manager to perform landlording tasks or inform tenants that you are the property manager, not the owner. With software available, you do not even need to interact with tenants.
Use a tenant screening and management process like RentRedi that makes it easy for landlords to manage their properties. RentRedi enables landlords to list properties, screen tenants with TransUnion-certified background checks, receive mobile-submitted rent, and manage maintenance requests.
Alternatively, you could use crowdfunded real estate platforms to invest in real estate and practice stealth wealth.
Fundrise is one of the top real estate crowdfunding platforms for non-accredited investors. Sign up for free and look at passive real estate investment opportunities with a low minimum (only $10).
Monitor Your Correspondence
Suppose you are genuinely dedicated to hiding your wealth from friends, family, and others. In that case, you’ll need to strictly monitor your correspondence and how information about your money and investments is communicated. It can prevent others from reading confidential or privileged information about your money, thus ensuring that your desire to stick to a stealth wealth lifestyle is protected.
Also, identity thieves frequently steal and use paper correspondence, and you might not even know about it. Credit Karma partners with Equifax and TransUnion and offers free credit reports and free credit scores updated weekly. It also provides alerts when it detects unusual activity on your credit files.
You can also sign up with Transunion with a paid subscription for additional monitoring and peace of mind.
Diversify Your Assets
Once you become the largest holder of any asset, it attracts attention. For example, Elon had to file a mandatory disclosure once his stake in Twitter crossed the 5% threshold, drawing everyone’s attention.
A wealthy person wanting to practice stealth wealth would be better off investing in index funds than acquiring an activist stake in a company.
A revocable living trust is a must in probate states like California to provide privacy. Your trust is private, and no one has access to your information. This privacy protects you from the public learning about your assets and beneficiaries.
Besides saving you probate costs, it also ensures your heirs receive what they are entitled to and are not harassed by publicly disclosing their inheritance.
Trust & Will provides state-specific trusts to protect and transfer your most important financial assets. You can also nominate legal guardians for your children to ensure they are looked after by someone you know and trust in case something happens to you.
Alter Your Mindset About Money
Fundamentally, stealth wealth is about reorienting your entire relationship with money. Money is not meant or necessary for lifetime success. Instead, it is needed to allow you to afford the basics.
People who engage in stealth wealth know that money is not the most crucial thing in life. It can be one of the most significant challenges for someone who wants to engage in a lifestyle of stealth wealth, but it is also the most necessary. Once you stop viewing money as a requirement for happiness, you’ll be able to spend less of it.
What Are Some Stealth Wealth Signs?
Stealth wealth is a lifestyle, but some people are better at it than others. Indeed, while many wealthy people are pronounced about their wealth, people who have stealth wealth and try to hide it may have varying degrees of success.
This begs the question: What are some stealth wealth signs? How can you tell if someone practices stealth wealth?
Avoiding Money Conversations
First, the person in question will never, ever talk about money. Remember, if someone has stealth wealth, they hide their money for a reason. Those reasons may vary, but they all likely come from a similar place: A desire to hide their money from the world.
As such, bringing up money risks exposing their stealth wealth. They will thus avoid any discussions of money and likely try to change the subject if money comes up. It may extend to money-adjacent topics, like material things, designer clothes, or luxury cars.
Not Displaying Their Wealth
Next, let’s make sure to reemphasize the word stealth. A person with stealth wealth is unlikely to do anything that would ever show off their wealth. As such, they won’t post their trips, assets, or other riches on social media, and they certainly won’t have any public presence that is even remotely similar to those of other wealthy people.
If someone is secretly wealthy, they will never publicly discuss what they have. Indeed, they may not have a social media presence at all, and if they do, it will likely be significantly toned down.
Blending In With Their Neighbors
People who practice stealth wealth are likely to be highly secretive in general. You may not know much about this person, and they may seem to blend into the background of any situation they are in. This, of course, is by design. If someone practices stealth wealth, you won’t know much about them. They will always keep their home address private and may have a reduced social life.
Let’s extend this conversation to a broader topic. People with stealth wealth will want to blend in with the rest of the world. They will have “normal” or “average” material possessions and never do anything flashy with their wealth. If you find out at a later date that someone had stealth wealth and are shocked by it, then they did their part.
What Are the Benefits of Stealth Wealth?
To understand this mindset and lifestyle, it is vital to remember why people practice stealth wealth. Many people with working-class backgrounds cannot comprehend why someone who practices stealth wealth would choose to do so, but the simple truth is that there are many benefits to doing so.
Avoid Money Issues With Family and Friends
As many wealthy people note, families and friends often express disproportionate interest in their finances. In many cases, they may even seek direct financial assistance for their life. It unquestionably can hurt cherished relationships.
As a result, many people who practice stealth wealth choose to eliminate the financial influence on their relationships and never discuss money with family and friends. It stops money from being a factor in any valuable relationships.
One of the most complex parts of early retirement is convincing others that you are not rich. Pick up a low-stress retirement job if you want to avoid awkward conversations. Since these are not recession-proof jobs, you can always get fired when you don’t feel like working anymore.
Many practitioners of stealth wealth come from a working-class or middle-class background, one in which having money was more of a struggle. As a direct result of this upbringing, they choose to be more limited with how they spend their money, perpetually choosing to save for a rainy day. In this instance, stealth wealth may not be so much a desire for secrecy but to protect one’s financial security in the long term.
Stealth wealth can also help limit the amount of money you ultimately owe to others, including the government. Many people who follow the principles of stealth wealth want to reduce the amount of money they owe to the government in the form of taxes. By limiting your overall spending, you can make sure that you owe less money to the tax man, thus freeing up more money for yourself.
Besides sales tax, several states also impose an additional luxury tax on goods and services. Of course, the government has a very different concept of luxury compared to everyday Americans. For example, ordering an alcoholic drink in Atlantic city is considered a luxury.
The New Jersey Motor Vehicle Commission (MVC) imposes a one-time 0.4% Luxury and Fuel-Inefficient Vehicle Surcharge (LFIS) on ownership of new passenger automobiles with a sales price or lease price of at least $45,000. Punitive taxes are one of the reasons for states losing population.
Protection From Danger
By practicing stealth wealth, you can also avoid putting yourself or your loved ones in danger. Think about it for a moment: How often do you read stories about someone who has been robbed after making a boastful post on social media that highlights their wealth or vacations?
Stealth wealth means that no one knows you have money. As such, this keeps you out of sight of someone who may want to rob you. It can be an excellent way of protecting yourself, your family, and your hard-earned assets. It also enables you to reduce the number of concerns you have about purchasing expensive security for your various assets, thus saving even more money in the long term.
Avoiding Lifestyle Creep
One of the most significant challenges with wealth is that once you have it, it can be hard to accept anything less. Once you start to buy fancy cars, you want another. And you must have a fancy suit that goes with that fancy car. And then you have to drive that car to lovely places, take nice vacations, etc.
This is known as lifestyle creep or lifestyle inflation, and the concept behind it is a perfectly understandable one that acknowledges human nature: The wealthiest people want to be rich in all things.
It can get expensive and problematic. What if your financial situation changes? Can you quickly return to a middle-class lifestyle? How will this impact your living expenses? Practicing stealth wealth ensures that you will protect your assets long-term and can best position yourself for financial success without spending too much.
Positive Relationship With Money
Stealth wealth can help you manage financial expectations. Again, let’s talk about human nature. The more you spend money, the more you are going to expect to spend more money. It sets you up for failure.
It also creates a situation where you expect to get a huge house, an expensive car, excellent clothing, etc. Stealth wealth can help you manage these expectations. It can help you create a more positive relationship with finances by keeping how you view money from the proper perspective.
This healthier financial relationship can protect you in the long run and allow you to build wealth for the right reasons instead of wanting to have money just to show off.
Finally – and perhaps most importantly – practicing stealth wealth can help protect you from one of the dangers of being rich. Unfortunately, far too many people who earn wealth allow it to change who they are.
We all know people who are so wealthy that they become someone different – someone worse. Stealth wealth views money in a very different way. It ensures that you view money as something good and necessary but not absolutely, positively needed to define who you are.
Instead, stealth wealth puts money in the background and forces you to live a life that is disconnected from your financial resources. It allows you to concentrate on personal development rather than building wealth for the sake of building wealth. All of this can protect you from having money change who you are.
Can You Be a Secret Millionaire?
Stealth wealth is a powerful, often under-utilized tool in anyone’s money management toolbox. It’s not just the wealthy that can benefit from its principles of frugality and investment; any savvy spender can use its tenets.
Stealth wealth encourages people to take control of their finances by being mindful of every purchase they make and ensuring they get the most out of their money.
In addition to saving more, stealth wealth provides freedom and security. A steadier lifestyle makes it easier to stay in control of your finances should anything unexpected arise.
The Millionaire Next Door is high on my list of best personal finance books since it describes stealth wealth and financial freedom.
By understanding and implementing these principles, everyone has the potential to secure their financial future – no matter how much money they make or don’t make. With some simple changes and effort, anyone can live a life of stealth wealth — one filled with rewarding experiences that you won’t find in material possessions.
It is crucial to recognize stealth wealth for what it is: A lifestyle choice and a challenge. Having wealth can be difficult enough, but most rich people spend what they have in a way that makes their wealth at least somewhat apparent.
To achieve stealth wealth, you must be prepared to answer a series of questions. What does stealth wealth genuinely mean to you? How intensely do you want to practice it? Does it mean simply making some spending choices, like avoiding country club membership, or do you want to go as far as to hide your net worth from your loved ones?
Once you answer these questions, you can begin to make specific decisions about stealth wealth, including what you want to do with your money and how you want to spend it.
Remember, if you want to achieve stealth wealth and live a more middle-class lifestyle, you’ll need to make significant lifestyle changes. There is no question that you can do this, but you need to be prepared to have stealth wealth fundamentally change your life.
John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
Here are his recommended tools
M1 Finance: John compared M1 Finance against Vanguard, Schwab, Fidelity, Wealthfront and Betterment to find the perfect investment platform. He uses it due to zero fees, very low minimums, automated investment with automatic rebalancing. The pre-built asset allocations and fractional shares helps one get started right away.
Personal Capital: This is a free tool John uses to track his net worth on a regular basis and as a retirement planner. It also alerts him wrt hidden fees and has a budget tracker included.
Streitwise is available for accredited and non-accredited investors. They have one of the lowest fees and high “skin in the game,” with over $5M of capital invested by founders in the deals. It is also open to foreign/non-USA investor. Minimum investment is $5,000.
Platforms like Yieldstreet provide investment options in art, legal, structured notes, venture capital, etc. They also have fixed-income portfolios spread across multiple asset classes with a single investment with low minimums of $10,000.